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GLOSSARY

ARR (Annual Recurring Revenue)

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Annual Recurring Revenue (ARR) is the predictable, annual revenue generated from subscription-based products or services.

What is ARR?

ARR represents the total annual revenue generated from recurring subscriptions.

Why it matters

ARR provides a clear view of the predictable revenue a startup can expect in a year, aiding in budgeting and growth planning.

Examples

  • SaaS companies often use ARR to measure revenue stability and growth.
  • An ARR of $1 million means the business can expect $1 million in revenue over the following year.

Related concepts

Monthly Recurring Revenue (MRR): Tracks monthly revenue.

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